Pfizer’s Lipitor is the most profitable and successful pharmaceutical. This week, the 20 year patent on Lipitor expired, opening the door for a cheaper “generic” version of the drug to be produced and distributed by other manufacturers. What does this mean for the valuation of the “Lipitor” brand? Can a strong trademark and brand presence overcome the loss of the temporary market protection a patent affords a product?
Pfizer isn’t going out of business because of the Lipitor patent’s expiration. Pfizer has other profitable drugs in their catalog, and many new ones on the radar. But Pfizer’s Lipitor strategy going forward needs to be done in a way that they maintain profits while others enter the market.
It is unclear how Pfizer will keep Lipitor sales high – the drug is in high demand, but insurance carriers will likely switch coverage to favor less expensive generic variants of the medicine. Cutting the price of the drug will help, but may not do much to prevent many alternatives from entering the field. -SAS